Margin Trading For Kids

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For instance let's say I gave you 100 candies and I want them back 1 week after. Let's say each candy I gave you worth 2 dollars. And you assume that candies worth will drop so you're selling the candies when they're worh 2 dollars. You earn 200 dollars from that trade. But you have to give my candies back. If candy's value drops (let's say it's worth 1 dollar now) you buy 100 candies for 100 dollars and give my candies to me. You have sold candies for 200 dollar at the first place and paid 100 dollar to give them back to me which means you've earned 100 dollars. But what if candy's price goes up? Well basically, you can lose endless amount of money based on how much value it gets. Even the each one of the candy's price goes up to 1000 dollar you have to give my candy back to me so which makes you lose tons of money in this case.